JPMorgan warning: Homeowners may walk away from mortgages

JPMorgan has a warning for its investors: underwater homeowners may be walking away from their mortgages and not looking back.

During a Monday filing with the Securities and Exchange Commission, JPMorgan told regulators that homeowners who owe more on their home than what it is currently worth may cease from making payments even though they are financially able to do so.

"While a large portion of the loans with estimated LTV ratios greater than 100% continue to pay and are current, the continued willingness and ability of these borrowers to pay is currently uncertain,” the bank stated, Huffington Post reports.

File photo / AP, 2009A chain and padlock take the place of door knobs and locks on a foreclosed home in the Bronx In this photo from March 6, 2009. Around one in eight defaults in February 2010 were strategic, according to a research report from Morgan Stanley analysts. A strategic default is when the homeowner has the ability to continue to make payments on his or her mortgage, but chooses not to. Strategic defaults have tripled since 2007, the report notes.

An underwater homeowner is one whose home is worth less now than the current mortgage note. About a quarter of all homeowners with a mortgage are considered underwater, totaling up to about 11.3 million homeowners in the U.S. Another 2.3 million homeowners have less than five percent equity.

All in all, 29 percent of homeowners are either underwater or close to the cut-off point.

Here's what's being said about homeowners walking away from their mortgages: